It’s Friday, so I thought “why not end the week with a brief...

It’s Friday, so I thought “why not end the week with a brief history lesson in Australian/Chinese mining JV's?”

The case study example for today's lesson will be the Altona ($AOH - now delisted) X Sichuan Railway Investment Group (SRIG) deal on the Little Eva, Cloncurry Copper Project located in Queensland. For those that have no idea what I'm talking about, fear not… as I have provided a brief summary of the key events below!

• $AOH signs $330M deal with SRIG for their Little Eva copper project in Queensland.
  "Production would be just under 40,000 tonnes of copper per annum and around 17,000 ounces of gold ... a large open pit moving some seven million tonnes of ore per annum ... so that's quite a big project."
• Huge optimism around the deal being signed, sealed and delivered due to it "being the right time in the commodity cycle" and the untapped future potential of copper metal.
  
  
• After almost two years of Pre-Feasibility Studies, the initial $AOH proposed deal for the Little Eva project with SRIG falls through at the financing stage.
  " Altona has determined that it will not provide SRIG with a further extension to enable it to seek the necessary approvals. Given this, the transaction under the Framework Agreement is now at an end, freeing Altona from its exclusivity with SRIG"
  DOES THIS STATEMENT SOUND FAMILIAR?!
• Although there is obvious disappointment in the market, $AOH MD, Alistair Cowden states "Altona now intends seeking an alternative transaction with a third party which will deliver value"
  AGAIN...DOES THIS STATEMENT SOUND FAMILIAR?!
• $AOH delivers an updated PFS for the Little Eva, Cloncurry copper project.
  "Opportunities identified to improve returns during project optimisation"
  OK... YOU SEE THE EMERGING PATTERN NOW RIGHT?
• $AOH merges with Canadian copper miner, Copper Mountain ($CMMC), through an acquisition based deal to develop the Little Eva, Cloncurry Copper Project.
  "Copper Mountain ($CMMC) to acquire Altona Mining to form a major new copper producer"
  "Offer represents a 41.7% premium to Altona's price"
  
  
• $AOH signs off-take agreement with Glencore for sale of copper-gold concentrates produced from the Little Eva, Cloncurry Copper Project.
  
  
• $AOH discovers a new cluster of copper-gold discoveries in the Cloncurry Copper Project region, thereby adding further value to the project with additional promising future prospects to be explored.
  
  
• End result : Copper Mountain ($CMMC) completes acquisition of $AOH, deal completed with Glencore, project progresses towards production, shareholders receive a premium price for shares held.

Now... you don't need to have Warren Buffet's prodigal foresight to be able to mark the stark similarities between the events that transpired above with $AOH/SRIG and $HAV's current situation, post - Wanbao. I should have mentioned this earlier but... all of the events stated above; from deal falling through to end result, unfolded over the short space of 12 months (less than in actual fact)! Please bear in mind that when making reference to $HAV's "current situation", I am specifically talking about the Kalkaroo copper-gold-cobalt project and not any other of the high value projects nestled in $HAV's project treasure chest!

However.... Just in case you wanted a visual representation of how $HAV compares to $AOH on a total contained copper basis (which, includes reserves from its other projects and NOT JUST Kalkaroo).


http://www.havilah-resources.com.au...pper_Strategy_Enhanced_by_Cobalt_21May18F.pdf

My 2cents,
JDI.